Candidates Emerge to Head Inter-American Development Bank

The Inter-American Development Bank (IADB) is preparing to elect a new president later this year.  CNN-Expansion, the Latin American financial news site of Time, Inc., reports that the names of three potential contenders to lead the IADB are already circulating.

According to the CNN subsidiary and other Latin media, potential support is being tested for Guillermo Ortiz of Mexico, Juan Jose Daboub of El Salvador, and Andres Velasco of Chile. 

Though it is unknown whether the current IADB president Luis Alberto Moreno will choose to compete for re-election or who will finally declare their candidacies at the July deadline, these are the names that are being discussed:

·        Guillermo Ortiz retired last month as president of Mexico’s central bank.  Ortiz served 12 years in that institution under both the PRI and the PAN parties.

·        Juan Jose Daboub is the Managing Director of the World Bank where his appointment ends in June.  Daboub is a former finance minister of El Salvador.

·        Andres Velasco is the finance minister of Chile where his term ends in two months. Velasco has been on leave from NYU where he is professor of economics.

·        Luis Alberto Moreno is the current president of the IADB.  Previously, he served for seven years at the ambassador of Colombia to the United States.

According to political analyst Mark Klugmann, several questions surround the upcoming election.

One uncertain variable is whether the bloc of countries loosely allied with President Hugo Chavez of Venezuela will present its own candidate to lead the bank.  Venezuela’s closest allies are Ecuador, Bolivia, and Nicaragua; however it may be possible to pool their votes with those of Argentina, Uruguay, Paraguay, Guatemala, El Salvador and Brazil.

Another question mark is what role the United States will play in electing the new IADB president.  One option will be to use U.S. diplomatic clout and its strong voting power to push a candidate preferred by Washington.   A second option, more in line with the new approach to Latin America announced by President Barack Obama, would be to support a consensus candidate that first has the backing of most Latin countries.

A third doubt is whether Moreno, elected to a five-year term in October of 2005, will pursue re-election, and if he does whether the leading challengers will choose to compete with him or will abstain from the contest. 

The current IADB president faces a more immediate challenge as he seeks support from the shareholders for a US$ 100 billion capital increase, an issue likely to be addressed at the annual meeting to be held in March in Cancun, Mexico.   Last year the bank reported a record US$ 15.9 billion in loan approvals and US$ 12 billion in disbursements.  

The election of the IADB president will be held on September 15^th with each of the 48 member states voting in proportion to their shareholdings in the bank. 

The shareholders include most countries in the Western Hemisphere as well as 16 European countries, plus Japan, China, Korea, and Israel.  The largest shareholders are the United States (30.1%), Brazil (10.75%), Argentina (10.75%), Mexico (6.9%), Japan (5%), and Canada (4%).  Another 11% of the voting shares are held by 16 European countries along with Israel and Korea. 

While the U.S. is the single largest shareholder, the countries of Latin America and the Caribbean hold a majority of the shares.  By tradition, the president of the IADB is a Latin American and the Executive Director of the bank is from the United States.